Scripscan:Sangam India Ltd
cmp:24
Code:514234
Story:Textiles is a commodity business, but not entirely for all manufacturers in the supply chain. Look at Sangam India. Sangam makes dyed polyester viscose yarn (PVY), which is sold to textile manufacturers like Reliance, Grasim, Siyaram, etc. It also uses the yarn to make fabrics, but right now 70% of its revenues come from selling PVY. Sangam exports about 15% of its output to 30 countries in Europe and the Middle East. Sangam’s products and processes are not spectacular. They are plain vanilla stuff. But, while fabric and garment manufacturers like Grasim, Arvind and Siyaram will have to fight for consumers’ wallet through expensive advertising and marketing strategies, Sangam, being a supplier of an intermediary product (PVY), is not subject to those challenges and pressures, especially since it is a dominant player in its segment. As a PVY manufacturer with 27% market share, it is, indeed, an important player. And it is planning to strengthen that position with a significant expansion.Sangam has expanded the dyed PVY capacity to 31,000 tonnes from 23,000 now, add 5,400 tonnes of cotton yarn capacity and 26,000 tonnes of PVY capacity. Total yarn capacity has trebled. It has also added 21MW of power capacity, which will substantially lower its power cost. These are linked to the expansion plan Sangam is putting through now.But all said and done,Numbers should dictate the future price trend for the company.A risky buy at 20 levels.
Wednesday, August 12, 2009
Important Disclaimer&Privacy policy
This blog does not share personal information with third parties nor do we store any information about your visit to this blog other than to analyze and optimize your content and reading experience through the use of cookies.You can turn off the use of cookies at anytime by changing your specific browser settings.This privacy policy is subject to change without notice and was last updated on 20.3.2013. If you have any questions, feel free to contact me directly here: arunsharemarket@gmail.com
Investment in equity shares has its own risks.Sincere efforts have been made to present the right investment perspective.The information contained herein is based on analysis and up on sources that I consider reliable. I,however,do not vouch for the accuracy or the completeness thereof.This material is for personal information and am not responsible for any loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations above.The stock price projections shown are not necessarily indicative of future price performance.The information herein, together with all estimates and forecasts, can change without notice.
